DISTRICT CONSUMER DISPUTES REDRESSAL COMMISSION, ERNAKULAM
Dated this the 12th day of March, 2024.
Filed on: 13/08/2021
PRESENT
Shri.D.B.Binu President
Shri.V.Ramachandran Member Smt.Sreevidhia.T.N Member
C.C. No 271/2021
COMPLAINANT
Rajesh Kottambadath, Smitha Bhavan, Thuruthussery, Mekkad, Nedumbassery, Ernakulam.
(Rep. by Adv.K.S.Arundas #35, DD Oceana Mall, Near Taj Gate Way Hotel, Marine Drive, Ernakulam-682 031)
Vs.
Opposite Party
Thomas Daniel, S/o. T.T. Daniel, Managing Partner, Popular Finance, Mary Rani Trading LLP, Popular Towers, Vakayar. P O, Konni, Pathanamthitta district, Pin-689698.
F I N A L O R D E R
D.B. Binu, President:
1. A brief statement of facts of this complaint is as stated below:
The complaint was filed under Section 35 of the Consumer Protection Act, 2019. The incident began when the complainant, influenced by an advertisement, visited the opposite party's branch office in Angamali. The staff confirmed they could accept deposits at a 12% annual interest rate, claiming authorization from the government and the Reserve Bank of India to accept public deposits. The complainant, alongside others, was enticed to deposit a significant sum as a fixed deposit.
Upon the deposit's maturity, the opposite party failed to return the funds, indicating a breach of trust and contractual obligation. Investigations revealed that the opposite party had amassed large sums from the public under false pretences.
The complainant alleges to have been victimized by unfair trade practices and service deficiencies by the opposite party. The complainant has filed a case seeking the return of their money along with compensation for experiencing unfair trade practices and a lack of service from the opposite party.
The complainant requests the commission to order the opposite party to return the deposit amount of INR 2,50,000 with an interest of 12% from the date of deposit, along with compensation of INR 2,00,000 for the distress caused. Additionally, a sum of INR 30,000 is sought for litigation expenses and the costs incurred for public notice publications.
The complaint underscores a clear case of financial misconduct and consumer rights violation, seeking justice and reparation for the losses and suffering endured by the complainant.
2) Notice
The Commission dispatched notice to the opposite party through registered post, which were returned by the postal service with the labels “Door Locked”. In response, the complainant filed an Interlocutory Application (I.A) for the notices to be published in a newspaper. The Commission approved this application, leading to the publication of the notices in a newspaper on 18/06/2022. Despite the notices being publicly circulated, the opposite party did not present themselves on the scheduled date. Their non-appearance led the Commission to declare them ex-parte.
3) . Evidence
The complainants submitted an ex-parte proof affidavit along with one document, marked as Exhibits-A-1. They also presented the original document for verification, which the commission examined and compared with their copy. Following the procedure, the commission returned the original document to the complainant as requested in the application.
Exhibit-A-1: A copy of receipt dated 13.03.2018, ₹ 2,50,000 issued by the opposite party acknowledging the deposit made by the complainant.
4) The main points to be analysed in this case are as follows:
i) Whether the complaint is maintainable or not?
ii) Whether there is any deficiency in service or unfair trade practice from the side of the opposite party to the complainant?
iii) If so, whether the complainant is entitled to get any relief from the side of the opposite party?
iv) Costs of the proceedings if any?
5) The issues mentioned above are considered together and are answered as follows:
In the present case in hand, as per Section 2(7) of the Consumer Protection Act, 2019, a consumer is a person who buys any goods or hires or avails of any services for a consideration that has been paid or promised or partly paid and partly promised, or under any system of deferred payment. A copy of receipt dated 13.13.2018, ₹ 2,50,000 issued by the opposite party acknowledging the deposit made by the complainant. The receipt evidencing payment to the opposite party (Exhibits A-1). Hence, the complainant is a consumer as defined under the Consumer Protection Act, 2019, (Point No. i) goes against the opposite party.
The complainant filed the above case seeking compensation for the deficiency in service caused by the opposite party’s failure to refund the deposited amount. The complainant alleges that the opposite party did not fulfill their obligation to return the money, resulting in a deficiency in the service provided to the complainant.
We have heard Sri. K.S. Arundas, the learned counsel appearing for the complainant, submitted that the complaint has been lodged to seek restitution and damages due to the opposite party's unfair practices and failure to provide the promised service.
The case originates from an advertisement by the opposite party, leading the complainant to visit their Angamali branch office. There, the complainant was assured of a 12% annual interest rate for deposits, with the opposite party claiming to have the necessary government and Reserve Bank of India authorizations to accept such deposits. Many, including public servants, have made significant fixed deposits based on these assurances.
However, when the time came to redeem the deposit upon its maturity, the opposite party failed to return the funds. Investigations revealed that the opposite party has been involved in a fraudulent scheme, collecting vast sums of money from the public without intending to return it, a clear violation of service expectations and fair-trade practices.
In response to the complaint, the commission has taken formal notice and attempted to contact the opposite party via post and newspaper announcements. Nevertheless, the opposite party has deliberately chosen not to respond or appear before the commission, resulting in them being declared absent for the proceedings.
Furthermore, the complainant has submitted a fixed deposit receipt for INR 2,50,000 as evidence, designated as Exhibit A1, which represents savings from a modest income. This situation has caused significant financial strain and emotional distress for the complainant.
Therefore, the complainant's legal counsel requests that the commission orders the opposite party to refund the deposit of INR 2,50,000 with a 12% interest from the initial date of deposit, alongside INR 2,00,000 in damages for the hardship caused, plus an additional legal expense and the costs of public notices. This action is sought in the pursuit of justice and to rectify the wrongs done to the complainant by the opposite party's unethical practices.
The evidence presented included an ex-parte proof affidavit filed by the complainant, and it was unchallenged by the opposite party. Therefore, the complainant's claims were considered credible and supported by the evidence. Therefore, the complainant requests the commission to grant the relief sought, including compensation for mental agony and unfair trade practices.
The opposite parity conscious failure to file their written version in spite of having received the Commission’s notice to that effect amounts to an admission of the allegations levelled against them. Here, the case of the complainant stands unchallenged by the opposite party. We have no reason to disbelieve the words of the complainant as against the opposite party. The Hon’ble National Commission held a similar stance in its order dated 2017 (4) CPR page 590 (NC).
In a similar circumstance, the Hon’ble National Commission upheld the decision of the District Commission in the case Aftab Islam v. Gofrain Molla & 13 Ors. (IV (2023) CPJ 163 (NC) and held that:
“8. This was also an admission on the part of the revisionist in the objection before the District Forum, which raises not only a serious doubt but also confirms that the revisionist and his associates were clearly involved in the transactions that was the basis of the claim in the complaint and which reflected large scale fraud defraying of investors genuine deposits in an unsecured and irresponsible way.”
We have carefully heard the submission made at length by the learned Counsel representing the complainant and have also considered the entire evidence on record.
In the matter before this Consumer Commission, the complainant has brought forth allegations of deficiency in service and unfair trade practices against the opposite party, as per the provisions of the Consumer Protection Act. The complainant's grievances include the non-refund of fixed deposits promised at an interest rate of 12% per annum, alongside claims for compensation for the unfair practices and additional costs incurred.
Upon thorough examination of the facts presented, the legal framework under the Consumer Protection Act, 2019, and relevant case laws, this Commission finds substantial merit in the complainant's allegations. As defined under Section 2(7) of the Act, a consumer is anyone who engages in transactions for goods or services for a consideration, which unequivocally applies to the complainant's situation.
The evidence, notably the fixed deposit receipt (Exhibit A-1) and the un responded notices sent to the opposite party, corroborates the complainant's claim of having entered into a financial agreement with the opposite party based on specific terms, which were subsequently not honoured.
- Deficiency in Service and Negligence
The refusal or failure to refund the deposit amounts upon maturity, as alleged, constitutes a clear deficiency in service and negligence on the part of the opposite party. This is further compounded by their failure to appear before this Commission despite due notice, leading to their declaration as ex parte.
Relevant jurisprudence, such as the case of Aftab Islam v. Gofrain Molla & 13 Ors. (IV (2023) CPJ 163 (NC)), underlines the liability of service providers to fulfil their obligations and the consequences of engaging in deceptive practices. In that context, the non-return of deposits, as agreed, significantly undermines consumer trust and violates the principles of fair-trade practices as stipulated in the Consumer Protection Act.
This Commission notes the complainant's reliance on the promises made by the opposite party, the financial and emotional distress suffered as a result, and the clear evidence presented. The Commission further observes the opposite party disregard for legal proceedings and consumer rights, indicating an implicit admission of the allegations made against them.
- Liability of the Opposite Party
Based on the evidence and the legal framework, the opposite party are found liable for the deficiency in service and engaging in unfair trade practices. Their failure to contest the claims or present any counter-evidence further solidifies this conclusion.
Upon the agreed deposit maturity, the complainant's efforts to withdraw the funds were unsuccessful, revealing that the opposite party had not only failed to return the money but had also engaged in fraudulent activities by collecting large sums from the public. This action, or lack thereof, constitutes both a service deficiency and unfair trade practice, prompting the filing of the current complaint.
Considering the evidence, the complainant's unchallenged contentions, and the serious deficiency in service caused by the opposite party, we find the issues in favour of the complainant. The opposite party actions amount to unfair trade practices and deficient services, deceiving and enriching themselves with the complainant's money and that of the public.
The necessity of robust consumer protection legislation and the enhancement of public consciousness to counteract financial deceit represents a critical concern in contemporary society. Financial deceptions inflict disproportionate detriment upon the most susceptible segments of the population, leading to considerable financial and psychological anguish. The case in point underscores the grievous impact of fraudulent practices and substandard services rendered by the opposite party, underscoring the imperative for just reparation. Financial misconduct indiscriminately impacts individuals across various educational backgrounds and socio-economic strata, constituting a breach of consumer rights statutes. It is imperative that individuals or entities engaged in such fraudulent and illegal activities are subjected to rigorous legal sanctions and held liable for their misconduct.
We determine that issue numbers (I) to (IV) are resolved in the complainant's favour due to the significant service deficiency and the unfair trade practices on the part of the opposite party. Consequently, the complainant has endured considerable inconvenience, mental distress, hardships, and financial losses as a result of the negligence of the opposite party.
In view of the above facts and circumstances of the case, we are of the opinion that the opposite party is liable to compensate the complainant.
Hence the prayer is partly allowed as follows:
- The Opposite Party shall reimburse the complainant ₹2,50,000 (Rupees Two Lakh Fifty Thousand Only) as the total deposited amount, as evidenced by Exhibit A-1 (the fixed deposit receipt).
- The Opposite Party shall pay ₹80,000 (Rupees Eighty Thousand Only) to the complainant as compensation. This amount is awarded for the deficiency in service and unfair trade practices, as well as for the mental agony and physical hardships endured by the complainant.
- The Opposite Party shall also pay the complainant ₹25,000 (Rupees Twenty-Five Thousand Only) towards the cost of the proceedings.
The Opposite Party is liable for the above directions, which shall be complied with within 45 days from the receipt of a copy of this order. Failing this, the amounts specified in Points I and II shall accrue interest at 9% per annum from the end of the 45th day compliance period until fully realized.
Pronounced in the Open Commission on this the 12th day of March, 2024
Sd/-
D.B.Binu, President
V.Ramachandran, Member
Sd/-
Sreevidhia.T.N, Member
Forwarded/by Order
Assistant Registrar
Forwarded/by Order
Assistant Registrar
APPENDIX
COMPLAINANT EVIDENCE
Exhibit-A-1: A copy of receipt dated 13.13.2018, ₹ 2,50,000 issued by the opposite party acknowledging the deposit made by the complainant
OPPOSITE PARTY’S EVIDENCE
Nil
Despatch date:
By hand: By post
kp/
CC No. 271/2021
Order Date: 12/03/2024
